New Thai Commerce Minister Vows to Bolster Rice Program

BANGKOK – Thailand’s new commerce minister vowed on Monday to make the country’s program to prop up rice prices for farmers more transparent after his predecessor was sacked over the weekend in the wake of running up $4.4 billion in losses.

Bloomberg News

Sacks of rice stacked in the warehouse of the Sahakorn Kan Kasert rice mill in Suphan Buri, Thailand, where a rice-pricing program is sparking criticism from all sides.

Mr. Niwatthamrong Boonsongpaisal replaced Mr. Boonsong Teriyapirom, who came under huge fire as the rice-pledging program that he oversaw resulted in massive losses.

Advertisement

The government introduced the rice-pledging program as a way to help farmers and drive up rural incomes. Policy makers bet that by stockpiling local rice, they would increase global prices for the grain, too. Instead, other exporters such as India and Vietnam stepped in to fill the gap in the market. India knocked Thailand off its perch as the world’s biggest seller of the grain. Thailand has been left with millions of tons of unsold rice.

“I will repair the image of the program, clear corruption accusations, and speed up the sale of the rice in the stockpile as soon as possible,” Mr. Niwatthamrong told reporters Monday on his first day at the Commerce Ministry.

The shift at the commerce ministry was part of weekend changes by embattled Prime Minister Yingluck Shinawatra, who reorganized her Cabinet midway through her term. The reshuffle was seen as an attempt to boost the government’s popularity that has been hurt by financial losses from the rice program and delays in government projects. In a recent poll by Bangkok University, Ms. Yingluck’s popularity was at 40.4%, a 10% decline from November last year.

The reshuffle involved 18 Cabinet posts, including 11 even newly-appointed ministers. Ms. Yingluck and her new Cabinet members were sworn in by Thailand’s King Bhumibhol Adulyadej on Sunday at Siriraj Hospital, where the 85-year-old king has been undergoing medical treatment.

The troubled rice program, now in its third phase, has undermined Ms. Yingluck’s administration’s credibility. In June, Ms. Yingluck’s administration cut the top price at which it buys rice from the country’s farmers to 12,000 baht ($390) a ton, starting June 30. The 20% reduction from the original price has angered many Thai farmers, who demanded that the government reverses its action. Last week, hundreds of farmers, including supporters of Ms. Yingluck’s Pheu Thai party, marched in Bangkok to protest the cut.

Jade Donavanik is among analysts who say the new commerce minister will have difficulty curbing losses or boosting the popularity of the government amid growing anger among the nation’s rice farmers, who comprise some 3.7 million households in Thailand.

“In essence, the government’s rice-pledging scheme is not sustainable,” Mr. Jade said, citing the government’s problem in selling the rice internationally because its pledged price is higher than the market price. “If the policy is flawed from the beginning, a new chief is not going to be able to fix it.”

In the new Cabinet, Ms. Yingluck also took the top post at the defense ministry after her predecessor, a former air chief marshall, was booted in the reshuffle. Mr. Yingluck’s brother, former prime minister Thaksin Shinawatra, was ousted in a military coup in 2006 and who lives overseas to escape imprisonment on corruption charges that he says was politically motivated.

“The most important dynamic relationship in the Thai politics is that between the politicians and the military, so it’s not surprising that the prime minister will want to be as close to the top brass as she can,” Mr. Jade said.

Mr. Kittiratt Na-Ranong remains the minister of finance. Ms. Benja Louicharoen, the first woman who took the top post at the country’s Customs Department, was appointed deputy finance minister.

In other moves, Deputy Prime Minister Chalerm Yubumrung, who had been overseeing security affairs, was appointed labor minister.

About Southeast Asia Real Time

Indonesia Real Time provides analysis and insight into the region, which includes Singapore, Thailand, Indonesia, Vietnam, Malaysia, the Philippines, Myanmar, Cambodia, Laos and Brunei. Contact the editors at SEAsia@wsj.com.

Islamic State is providing “fresh oxygen” to extremist groups in Muslim-majority Indonesia, says a police official. What impact could the group known as ISIS have on Indonesia? And how is the government working to curb the danger? Here’s the short answer.